Question

Question 3 (0.5 points) Suppose a typical worker in India can produce 32 units of product in an eight-hour day, while a typical worker in Bangladesh can produce 30 units of product in a 10-hour day. We can conclude that a) productivity is 4 units per hour for the worker in Bangladesh and 3 units per hour for the worker in India, b) worker productivity in Bangladesh is higher than in India. c) the standard of living will likely be higher in India than in Bangladesh. d) there will be no difference between the standard of living in India and Bangladesh. Question 4 (0.5 points) Which of the following claims is consistent with the views of mainstream economists? a) If we increase the rate of inflation from 3 percent to 6 percent, then the rate of unemployment will temporarily rise. b) If we increase the rate of inflation from 3 percent to 6 percent, then the rate of unemployment will temporarily fall. C) If we increase the rate of inflation from 3 percent to 6 percent, then the rate of unemployment will

Answer 1

3 Country Production units Production hour Unit/hour India 32 8 4 Bangladesh 30 10 3 Correct option is C The productivity in India is faster than Bangladesh leading to increase in standard of living in India Productivity is 4 units per hour in India and 3 unit per hour in Bangladesh (Table above) Worker productivity in India is higher than Bangladesh as Indian worker produces more unit per hour than Bangladesh workers There is a difference in standard of living in India and Bangladesh as productivity is higher in India and less in Bangladesh

4 Correct Option is B If we increase the rate of Inflation from 3% to 6% Then the rate of unemployment will temporarily fall Inflation and unemployment have inverse relation as per Phillips curve If we increase the inflation rate from 3% to 6% then unemployment rate will temporary will fall they will not rise Due to the inverse relation between Inflation and unemployment This implication is for short term i.e temporary